ITC Secure Networking, a London-based MSSP owned by venture firm C5 Capital, will be built out into a large, pan-European cyber specialist through a series of acquisitions, two of the institutional investor’s principals said.

Armed with ITC Secure Networking, C5’s three- to four-year plan is to construct a regional European MSSP sporting a wide portfolio of capabilities, including expertise in cloud-based cyber defenses, high levels of automation and local regulatory compliance. The VC has already set its sights on six to eight buyouts across Europe, toting a $142 million war chest to make those deals and others like it, the VC’s chairman and partner Andre Pienaar told Reuters.

C5 acquired ITC for $34 million in 2016. Looking ahead, the expansion plan sounds somewhat similar to the rough blueprint laid out by Optiv, a Top 100 MSSP for 2017. Indeed, Optiv hired of M&A veteran Simon Church to pursue pan-European growth — fueled in part by acquisitions. Optiv is owned by KKR — a private equity firm with deep pockets.

MSSP Market Growth — And Consolidation?

Given the C5 and Optiv strategies, are we seeing the early signs of an industry consolidation? It’s not so far-fetched. Both ITC and Optiv want to position themselves as pure play security providers, growing in talent, customers and sales reach through successive acquisitions. And, similar to C5, Optiv contends the market opening is as a pan-European security provider. But each will face headwinds from European customers’ preferring local suppliers. “Europe is a market where being local is very important,” C5 investment officer Daniel Freeman reportedly said.

C5 may be a bit further along than Optiv in identifying buyout targets. While Freeman didn’t name names he did tell Reuters that the initiative will springboard from the German market. “We want to gain ground in the key markets this year. The German market is the center of the chessboard,” he said. “C5 is a very long way down the track with our first cyber security acquisition in Germany.”

Other security firms in the Benelux and Nordic regions of Europe are apparently getting some looks as well. “We have a number of acquisition conversations underway,” Freeman said.